Tax challenges and changes in Australia and ASPAC 

Vidcast on the tax challenges and changes in Australia and ASPAC
Featuring Deborah Jenkins, Regional Chair, Indirect Tax, KPMG Asia Pacific

DJ: Deborah Jenkins, the Regional Chair for Indirect Tax in the Asia Pacific Region. We’re certainly saying indirect tax is globalizing, and what we’re certainly seeing, too, is the indirect tax authorities are talking to each other, so if you see a new initiative coming out in Singapore, it’s not going to be long before you see that initiative coming out in our region in, say, Australia or in New Zealand, or even in Japan. They’re interested to see how they can get the most revenue for their budget, and we’re seeing that certainly sharing of ideas, and also sharing of rate rises, for example, when one country has a rate rise, you can certainly see pretty quickly the other countries are looking at, ‘well, hang on, where do we sit in the marketplace compared with them?’ 

There are a number of different ways of driving the indirect tax performance and function to drive results for the indirect tax manager. Those can range from the corporate governance side of things to throughput of indirect taxes, through to savings, and particularly cash flow benefits. When we look across indirect tax practices globally, we look at how are those departments being assessed, and how are they performing? And that might be, for example, on how much GST or indirect tax or VAT that they can be saving; how frequently they are paying to the revenue authorities; the level of interactions they might be having with the tax authorities in their countries. We’re seeing this coming through in things like, a risk differentiation framework would be an example, in Australia where the authorities are really interested in how tax is being managed, and in particular, indirect taxes are being managed.

Certainly looking at collection of tax revenues, the corporate tax framework has really reached a level of maturity, and we’re seeing the rise of indirect taxes globally. Indirect taxes are certainly a stable base of taxes, and the global financial crisis brought that home. We saw a number of countries around the world looking to raise revenue through the increase in indirect tax rate. The other thing about indirect taxes, they’re generally a really efficient way of collecting tax, and when you’re seeing some of these governments really struggling to make their budget balance, indirect tax is a good, stable source of revenue, and I think we’re going to see, continue to see actually, the rise of indirect taxes globally.